How artificial intelligence in retail is changing the industry

AI in retail

Marketing in today’s digitized world has to provide a seamless experience across multiple channels, surprising clients, and customers with same-day deliveries and sending real-time, personalized messages to them. Artificial Intelligence in retail is about more than simply big data, it’s about using this data in innovative ways to create personalized customer experiences. It’s about approaching marketing from a completely different angle and using artificial intelligence to create new and exciting experiences for your customers.

How has AI (artificial intelligence) changed?

We are still many years away from having robots at our beck and call, but since its inception, AI has changed drastically over the years. Examples can be seen in everyday use such as weather applications, spam filters for emails, and Google’s search predictions.

AI is not a new concept and has roots as far back as Ancient Greece. And, Alan Turing, a British codebreaker in WWII, is credited as being one of the first people to put forward the idea that machines could ‘think’ in 1950. He created the ‘Turing test’, which is still used today as a benchmark to test a machine’s ability to ‘think’ like a human.

The rise of personal computers in the 1980s sparked more interest in machines that ‘think’. AI changed from being a science fiction dream to a reality over the course of many years, resulting in what we have today. It’s ever-evolving and the premise of AI is that it continually learns from the data it receives, which is why artificial intelligence in retail is helpful for marketers and retailers.

How is AI being used in retail?

Personalized product recommendations

Anyone who has shopped online is familiar with customer recommendations. This AI application allows you to create tailored recommendations to customers based on data collected from their shopping habits, browsing history, and past purchases.

There are several different ways to implement product recommendations, which include abandoned cart notifications, ‘recommended for you’ products, and ‘second sale’ products. It is estimated that at least 35 percent of Amazon’s sales are generated by the recommended products feature. You can implement customized product recommendations in email or SMS marketing campaigns and on your website.

AI-powered visual search

AI-powered visual search is by no means a new idea, but with the advancements in artificial intelligence and mobile technology, it is gaining traction with retailers. Visual search is highly popular amongst digitally savvy customers.

Visual search allows customers to take photographs of items that they like and have an app show them similar items from a store’s inventory. This sort of application increases customer engagement and helps to enhance the customer experience. It’s especially effective in fashion retail stores and can be a unique marketing tool for up-and-coming fashion brands.

Chatty chatbots

Today’s consumers have shown that they prefer interacting with bots rather than wasting time holding on a call to speak to a live agent. As we all become accustomed to it, the number of people who prefer this method of communication will continue to increase.

The speed and immediacy of these messaging apps can also allow retailers to have efficient one-on-one conversations with their customers, once the ‘bot’ side of the conversation has taken a customer down the funnel to speaking with a live agent. Chatbots can handle thousands of messages that come in through social media and messaging apps and allow for speedy purchases and interactions. Using chatbots puts you ahead of the competition and can help to streamline your customer’s buying journey.

Problem-solving abilities

One of the advantages of using artificial intelligence in retail is that AI engines are designed to tackle problems in unique ways. They may read correspondence or they can understand the tone of voice to evaluate customer sentiment, enabling them to better answer queries or complaints.

There are some experimental areas that are alchemical in their nature, such as the storage, sorting, and classification of any type of image or any kind of document capabilities of IBM Watson which need to be tailored to retail. This type of sorting ability will, for example, allow courier companies to solve problems quickly and easily, as well as allow stores to sort their inventory within minutes.

Artificial intelligence in retail allows you to meet your customer in their micro-moments

Using AI engines as part of your marketing strategy will allow you to gather pertinent, in-depth information about your customers. You’ll be able to deliver marketing campaigns that are highly contextual at just the right moment of your customer’s journey. If you’re interested in finding out more, read our article on artificial intelligence in retail and e-commerce.


Explore other articles

Step into the future of business messaging.

SMS and two-way channels, automation, call center integration, payments - do it all with Clickatell's Chat Commerce platform.